Morgan Stanley Downgrades Flagstar as Higher Rates Delay Its Turnaround

Morgan Stanley downgraded Flagstar Bank on Nov. 4 and cut its price target, citing higher rates that are delaying the bank’s turnaround more than the firm had expected.

The firm moved its rating from Overweight to Underweight and reduced its target to $12 from $15.

Flagstar’s earlier outlook set its 2027 diluted adjusted earnings-per-share forecast at $0.85-$0.95, compared with $1.60-$1.70 previously. The bank also moved the full realization of its long-term objectives to 2028 in its revised outlook.